Question 1

What is the P:D ratio?

Accepted Answer

P is your pipeline lead time — how long it takes to source, make, ship, clear and deliver a product from a standing start. D is the demand lead time — how long the customer will actually wait before buying elsewhere. When P is longer than D (the normal case for imported goods), you have no choice but to forecast ahead and hold stock to bridge the gap. The P:D ratio is P divided by D.

Question 2

Why is so much of pipeline lead time "dead time"?

Accepted Answer

When companies map their pipeline end to end, the time genuinely spent doing something to the product is usually a small fraction of the total. Most of it is the product sitting still — queueing, waiting for a vessel, dwelling in a port, or waiting for documents to clear. That non-value-adding time is the biggest compressible opportunity, and it is where a P:D analysis points you.

Question 3

How does shortening the pipeline help?

Accepted Answer

Narrowing the gap between P and D shrinks three problems at once: you rely less on forecasting, you need less safety stock to cover forecast error, and you dampen the bullwhip effect. A shorter, more reliable pipeline lets you promise faster, react sooner and carry less speculative stock for the same service level.

Lead-Time (P:D Ratio) Analyser

Your pipeline, stage by stage (days)

Stage	Value-add (days)	Waiting (days)